The credit rating agency Fitch has left New Zealand's credit rating at AA, but says there's a chance it may be raised in the future.
That helped boost the New Zealand dollar to its highest level in three years, jumping above 88 US cents overnight.
The currency is still a little shy of the post-float record of 88.4 US cents reached in August 2011.
Fitch Ratings also raised the country's AA sovereign rating outlook from stable to positive.
It cites falling government spending for the upgrade, but warns that a sharp slowdown in China would hit the economy hard.
Debt and dependence main risks
Fitch notes New Zealand's main vulnerability relates to its high net external debt and dependence on commodity exports.
However, the international ratings agency says the risks are countered by likely steady strengthening in demand for New Zealand's exports from Asian trade partners as incomes rise.
Fitch says the country's economic policy framework, business environment and standards of governance rank among the world's strongest from a credit perspective, warranting "high grade" sovereign ratings.
The finance minister, Bill English, says Fitch's decision endorses the government's plan to post a fiscal surplus next year and to reduce crown debt to 20 percent of the economy.
A foreign exchange strategist at ANZ Bank, Sam Tuck, says the upgrade means New Zealand bonds are more attractive to investors and that the currency could continue to bounce around the 88 cent mark.
The positive outlook, which was announced overnight on Tuesday, indicates the likely direction of the credit rating over the next year or two, although it is not confirmation that a change will occur.
Alongside Fitch's AA rating with a positive outlook, New Zealand is rated AAA with a stable outlook by Moody's and AA with a stable outlook by Standard and Poor's.